UK government crackdown on false holiday compensation claims

Balearic hoteliers and the islands' tourist industry at large yesterday welcomed news that the UK government is to toughen its stance on false holiday claims. The government is to close a legal loophole linked to a sharp rise in compensation claims for sickness arising from package holidays.

The justice ministry has announced that it will introduce curbs on the court costs which can be incurred by tour operators, bringing the laws regarding package holiday illness claims in line with those already in place for other personal injury cases. The changes will come into effect "in the coming weeks", just in time for the summer holiday season.

Until now, there were no limits on the legal fees facing tour operators who challenged questionable claims of food poisoning allegedly suffered at all-inclusive resorts. As a result, many firms opted for out-of-court settlements, which in turn is thought to have encouraged "shady" law firms to make spurious claims in the hope of easy payouts.

Travel industry body Abta estimates that claims relating to package holiday sickness have skyrocketed by 500% in recent years, even as reported outbreaks of food poisoning in resorts have dropped. Around 35,000 claims were submitted in 2016, compared to 5,000 in 2013.

The spike in illness claims "sparked concerns that the UK’s reputation overseas is being damaged and that British tourists will face higher package holiday prices".

Announcing the crackdown, justice minister Rory Stewart said: "Claiming compensation for being sick on holiday, when you haven’t been, is fraud. This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice."

Abta chief executive Mark Tanzer said: "False sickness claims have been costing the travel industry tens of millions of pounds and damaging British tourists’ reputation abroad. We are pleased that the justice ministry has responded to the concerns and evidence raised by Abta and our members by taking firm action on this issue. Closing the legal loophole before the summer should lead to a reduction in the number of false claims. We encourage the government to keep this matter under review and continue to pursue a ban on cold calling by claims management companies in relation to sickness claims."